Small business owners' fury over new VAT loophole

The Government appears unwilling to close tax loopholes that enable retailers to avoid charging VAT to their customers.

Evidence passed to Revenue & Customs by independent experts and small businesses shows many retailers are still avoiding charging VAT on goods, such as DVDs, shipped to Britain from the EU or further afield.

It follows the closure in April of a loophole allowing retailers with a Channel Islands base to send goods worth up to £15 to Britain free of VAT.

Mockery: Julia Roberts in the film Mirror Mirror, now on DVD, being shipped free of VAT by stores

The dodge cost the taxman hundreds of millions of pounds and put small firms out of business.